This is an important question if you expect the malpractice insurance carrier to pay your malpractice claim. Not properly insuring the attorneys can cause a claim denial. Lawyers Professional Liability Insurance policies are written to cover the Law Firm. By extension all of the attorneys and employees that work for the firm past and present are covered for covered work they have done on behalf of the ‘named insured’ firm. The current Axis policy definition is typical:
“You means the named insured and the persons or entities described below:
a. any lawyer, partnership, limited liability partnership, professional corporation or professional association, limited liability company or limited liability partnership who, as of the inception date of the policy, is a partner, officer, director, stockholder-employee, associate, manager, member or employee of the named insured;
b. any lawyer, partnership, limited liability partnership, professional corporation or professional association, limited liability company or limited liability partnership who:
i. after the inception date of the policy and prior to its termination, becomes a partner, officer, director, stockholder-employee, associate, manager, member or employee of the named insured;
ii. was previously affiliated with the named insured as a partner, officer, director, stockholder- employee, associate, manager, member or employee of the named insured;
iii. is acting as "of counsel" to the named insured; or
iv. is acting as an independent contractor or on a per diem basis to the named insured;
but only for professional legal services performed on behalf of the named insured during the time of such affiliation. Those of you who qualify for and elect a non-practicing extended reporting period shall be considered within the definition of you as set for the in paragraph a. above; and
c. each nonlawyer employee who was, is, or becomes an employee of the named insured, but only while acting within the scope of employment on behalf of the named insured at the time of such employment.”
This is pretty boring stuff until an attorney has his ‘own’ policy but is working for another firm without being insured under the other law firm’s policy and there is a claim. Problem arises because the work that the attorney is doing is not on behalf of the ‘named insured’ as defined in the policy. If this attorney gets sued for work done for a firm other than his “own” firm, say ‘John Smith Attorney at Law’ but is doing the work for Jones Law Firm. When Jones Law Firm gets sued for the work done by John Smith, there will be no coverage. John Smith needs to be insured as an attorney under Jones Law Firm to have coverage.
Conversely, if John Smith is insured under Jones Law Firm but does work as John Smith Attorney at Law, not for Jones Law Firm, there is no coverage. John Smith in this case needs a policy that insures John Smith Attorney at Law as the Named Insured.
Lawyers Professional Liability Insurance policies are contracts. This is an important contract for the firm and attorney to have read and understand the definition of an insured.